Carbon Direct buys 7 percent stake in Calix's carbon capture unit

MELBOURNE Reuters - Australia's Calix Ltd has lined up an investor to buy a stake in its carbon capture technology unit, valuing the business at A $350 million $256 million it said on Wednesday.

Calix shares rocketed 20% to a record high after the company said Carbon Direct, a New York-based investor, had invested 15 million euros $18 million for a 7% stake in Calix's LEILAC Group to back scaling of its technology.

Calix, which stands for Low Emissions Intensity Lime and Cement, is focused on commercialising LEILAC's patented kiln which captures carbon dioxide CO2 from limestone in the production of lime and cement.

The International Energy Agency and the UN Climate Panel are said to be in favour of Carbon Capture for global warming. Cement manufacturing produces 8% of global carbon emissions, generating more than 4 billion tonnes of CO2 a year, two-thirds of which comes from heating limestone to produce lime and cement.

Phil Hodgson said capturing emissions was a huge business opportunity given the royalties that LEILAC could earn as a percentage of carbon prices. In the European Union, the Carbon price averages around 55 Euros per tonne currently.

As the world makes emissions trading schemes in place it does start to look like a multi-billion dollar addressable market, Hodgson told Reuters.

Carbon Direct backed LEILAC after Calix completed a two-year pilot test of its kiln at Heidelberg Cement plant in Belgium in June. Based on the success of that test, Heidelberg Cement and the EU have agreed to fund a scaled up trial at one of the company's plants in Germany.

The CEBRE partners are very impressed with the technical and commercial rigor of LEILAC, CAX spoke out in their excitement about LEILAC, Carbon Direct CEO Jonathan Goldberg said in a joint statement to Calix.

Calix aims to build in the final testing project to retrofit Heidelberg plant for the larger trial in late 2023 or 2024.